THE LOGISTICS BLOG

Drone Use for Facility and Last-Mile Optimization

Competition between businesses and within supply chains require companies to explore and adopt innovative technology to strategically enhance their position within the market. Drones are one such technology that can give businesses a competitive edge.

Besides competitive forces, companies also face challenges presented by customers and their demands, as well as their own internal processes. Driver shortages require careful planning and economic conditions can bring with them unprecedented increased costs. Because of these factors, companies must diligently manage pick up and delivery procedures in order to provide the best quality service possible.

Flying Drones for Last-Mile Optimization

There are multiple ways in which supply chain players can optimize drones, with the first being last-mile optimization. A large challenge when delivering products is the time frame upon which the product will be delivered. Often customers can be at home for hours waiting for a package to arrive. Therefore, it is critical to ensure delivery routes are optimized and balanced to reflect customer demands and needs. As a valuable investment, drones can assist with specializing and customizing delivery directly to customers. They can act as a versatile courier device to assist with complicated deliveries and deliveries within short distances.

As a result of drone use, companies can easily increase their service levels by better forecasting when a product will arrive in the customer's hands. Customer expectations when it comes to service have never been higher. Customers will appreciate more accurate delivery times, and businesses can attribute a noteworthy characteristic to their brand.

Operating Drones Within Supply Chain Facilities and Company Property

Drones have several uses within supply chain facilities. They can be an effective and fast way to count inventory stored in a warehouse and move it around. Using employee manpower, these tasks can take up valuable time of many workers and limit what other activities can be completed. Inventory taking for example will typically require many workers and a shutdown of other activities in a facility. At an estimated cost of $20/hr for an employee and an average time of 4+ hours, every inventory could cost an estimated $80 per employee just in labour costs. With five employees doing inventory once a quarter, that's $1,600 a year in potential cost reduction before considering additional costs for slowing the facility down. Plus, checking high slots can prove to be difficult and may require more equipment. In addition to easily completing this job, drones can also find lost pallets quicker and move smaller items to hard to reach shelves. Compared to forklifts and conveyor belts, drones would be faster, simpler, and more flexible. Companies could also see a reduction in expenses by eliminating the need for this other equipment. Wal-mart is currently testing the use of drones within their distribution centers for efficiency with these types of tasks, and if the tests are successful, drone use will move forward.

For warehouses and manufacturing facilities that store valuable, high-end goods, drones can act as an additional security feature. Equipped with cameras, they can perform perimeter walks or safety inspections. Positioning drones as a way to enhance employee and facility safety can be an effective buy-in to help employees accept the adoption of this technology.

In the future, maintenance and repair work can be given to drones too, especially in larger manufacturing and distribution centers. They could be used for warehouse roof inspections, or to retrieve tools for employees across the yard or building. In turn, this situation would reduce travel time, as well as non-value-added work. Much farther into the future, drones may possibly be used to conduct simple repairs.

As for yard management, this disruptive technology can be optimized to locate and identify missing assets. Many yards happen to be congested, packed tight bumper-to-bumper to save room because yard space can be limited. Because vehicles and other equipment are packed so tightly, it can be hard to read the tags of ones stored in the middle. However, drones can easily read the tags of vehicles despite the difficulties presented.

Drone Factors Supply Chain Players Need to Consider

As with any technology, there are minor risks associated with drones that supply chain players must be aware of. These risks will become non-existent with the advancement of further research, development, and government legislation. Current government legislation requires all drone owners to register their device if it weighs over a certain amount. Drones are also restricted to flying under 400 feet and can only operate during daylight hours. An important policy to note is that drone use must be within line of sight at all times. However, some companies have received an exemption from this rule when using the devices in remote locations. Further legislation can encourage economic drone growth.

Drones can be a valuable asset throughout supply chain points. As a cost-effective and quick way to complete tasks, drones can be used for last-mile optimization, and in supply chain facilities and the surrounding company property.